1. What is the return of a stock that trades at $35, will pay a $0.75 dividend at the end of the year, and grows at a rate of 6%?
8.14%
8.53%
8.97%
9.53%
10.01%
2. Stock X just paid a dividend of $3.00. The dividend is expected to grow at a constant rate of 6% per year. If the required return is 11% and the stock is in equilibrium, then it currently trades at a price of:
$45.48
$50.00
$58.15
$60.83
$63.60